With Main Street small- to medium-sized businesses (SMBs) suffering through a downturn more ruinous than any in living memory, many that make it will do so by accessing new customers and markets in other countries. Fortunately, the U.S. government is helping with this.
As Loretta Solon Greene, associate administrator of the Small Business Administration’s (SBA’s) Office of International Trade (OIT) told PYMNTS, “Small businesses that may not have looked at selling overseas are taking another look. They are coming to realize what we’ve long known at SBA: Businesses that export are more resilient because they are less dependent on any one market.”
A perfect case for this is made by the SBA’s 2020 Small Business Exporter of the Year, Florida-based Genesis Water Technologies (GWT), being honored during this week’s National Small Business Week celebration over cross-border trade triumphs facilitated by the OIT.
GWT is now deriving 40 percent of total revenues from overseas markets, and sales of its sustainable water treatment technologies doubled in 2019 alone — hence the recognition.
Owner and Technical Director Nick Nicholas told PYMNTS that when GWT first began selling overseas, “there were always barriers to entry ... with regard to cross-border transactions [including] default risk and payment risk. When we were dealing with cross-border transactions [before], basically it was an irrevocable letter of credit or a bank transfer. Then you had to determine currencies in U.S. dollars ... and how it converted.”
In other words, such transactions were exhausting and risky. But things began to change when Nicholas reached out to the SBA and found a wealth of partners and resources. Noting that “we didn't have a focused strategy” when GWT first tried to go it alone in foreign markets, Nicholas said the SBA “introduced [us] to their counterparts at the U.S. Commercial Service and then Enterprise Florida. We all worked hand-in-hand as a team.”
Now Is The Time For SMBs To Export ‘Aggressively’
Beginning with GWT’s first formal marketing strategy — funded by a grant from the SBA State Expansion Program (or “STEP”) — the objective was to pinpoint “a specific marketing strategy for exporting,” Nicholas said.
Since then, the company’s cross-border trade has blossomed.
“It's been [a] consistent plotted approach,” he said.
GWT’s success in overseas markets is something the SBA’s OIT is keen on reproducing as millions of American SMBs face an uncertain future of intermittent COVID-19 flareups and other disturbances.
Cross-border trade is both a long- and short-term fix, with immediate cash flow implications and revenue streams that can grow into serious international trade with the right resources.
“We firmly believe that this is the time for small companies to get into exporting aggressively,” SBA’s Greene told PYMNTS. “Today, trade represents 58 percent of the world’s $80 trillion economy compared to just 24 percent in 1960. If we can help even a small fraction of those small businesses to become exporters, we could significantly move the needle to increase the numbers of exporters in the U.S., and play their essential role in creating jobs and continuing to fuel our country’s economic recovery.”
Ongoing Assistance For Recovering SMBs
While GWT’s dealings with the SBA’s OIT began some time ago, it was Nicholas’ recent leveraging of the relationship that garnered Exporter of the Year accolades.
“Typically in our industry, [the sales] focus ... has been on trade shows,” he said. “The industry was basically driven by trade shows, then the pandemic happened and no travel, no trade shows.”
But GWT again turned to its SBA/OIT partnership to overcome barriers.
Noting that “we hadn't been [involved] in digital marketing previous to COVID,” Nicholas told PYMNTS that 2020 marketing activities are timed well with the budgetary cycles of water treatment system clients, which led to the planets aligning and a doubling of revenue.
“Our digital shift in 2020 is focused more on delivering appropriate content to our clients and working with our research partners as well as our local business partners to get that content where it needs to be, [since] trade shows are no longer a [selling] option,” he said.
SBA’s Greene added that “thanks to the internet, even the smallest producer of goods and services can go global today, which allows for fast, breakthrough growth provided a business owner has know-how.”
Greene pointed out a new international sales information resource site, tradetools.gov, to help SMBs “learn where to direct questions and find resources.”
Nicholas said that inquiring in the first place is what got things rolling for his firm. But now, the trick is to multiply the effect.
“Only 1 percent of the 30 million U.S. small businesses currently export,” Greene said. “Roughly a third of small businesses either don’t know where to start, believe the regulatory environment is too complex or that it’s too difficult to get financing for their international operations. OIT has solutions to each of these obstacles.”